NFL player charged in $24 mln covid-relief fraud scheme
By a Biometrica staffer
Former New York Jets wide receiver Joshua J Bellamy was arrested in Florida and charged for his role in a scheme that involved defrauding the Paycheck Protection Program (PPP). The National Football League (NFL) player and his associates allegedly filed fraudulent loan applications seeking more than $24 million in forgivable PPP loans under the Coronavirus Aid, Relief and Economic Security (CARES) Act.
Bellamy, 31, was charged in a federal criminal complaint with wire fraud, bank fraud, and conspiracy to commit wire fraud and bank fraud, the US Department of Justice said in a statement.
Early in the scheme, Phillip J Augustin allegedly obtained a fraudulent PPP loan for his talent management company using falsified documents. After submitting that application, Augustin then began to work with other co-conspirators, including Bellamy, on a scheme – to submit numerous fraudulent PPP loan applications for confederate loan applicants, in order to receive kickbacks for obtaining the forgivable loans for them.
Bellamy is alleged to have received a PPP loan of $1.24 million for his own company, Drip Entertainment LLC. He is said to have used that money to purchase over $104,000 in luxury goods, including purchases at Dior, Gucci, and jewelers. He allegedly spent around $62,774 at the Seminole Hard Rock Hotel and Casino, and withdrew over $302,000. Bellamy is also said to have sought PPP loans on behalf of his family members and close associates.
The complaint alleges that the scheme involved the preparation of at least 90 fraudulent applications, most of which were submitted. Many of those loan applications were approved and funded by financial institutions, paying out at least $17.4 million.
PPP & the CARES Act
Established by the CARES Act, the PPP provides small businesses with necessary funds to remain operational despite the severe economic hit from the covid-19 pandemic.
The CARES Act is designed to provide emergency financial assistance to millions of Americans who are suffering the economic effects of the covid-19 pandemic, and was enacted as federal law on March 29. One source of relief is the authorization of up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses through the PPP. In April, Congress authorized over $300 billion in additional PPP funding.
Through PPP, qualifying small businesses and other organizations are eligible to receive loans with a maturity of two years and an interest rate of 1%. Businesses must use PPP loan proceeds for payroll costs, interest on mortgages, rent and utilities. The PPP allows the interest and principal to be forgiven if businesses spend the proceeds on these expenses within a set time period, and use at least a certain percentage of the loan towards payroll expenses.
Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud Hotline at 866-720-5721 or via the NCDF Web Complaint Form.